20th April 2015

Results for the Year Ended 31 December 2014

New customer experience driving strong growth

Financial Highlights

  • RevPar(1) up 16.8% to £34.24 (2013: £29.32); outperforming the market
  • Total revenue up 14.9% to £497.2m (2013: £432.6m)
  • Average room rate(1) up 15.1% to £45.33
  • Occupancy(1) up 1.0 percentage point to 75.5%
  • EBITDA(2) up 63.5% to £66.2m (2013: £40.5m)

 

Operational Highlights

  • £100m modernisation programme now nearing completion
  • 90% of UK guest rooms now modernised with new room design
  • Average Trip Advisor score of 4 out of 5 stars at modernised hotels
  • Improved quality driving strong growth from business customers
  • Excellent progress on centralised yield management driving rate

 

Q1 2015 Trading and Outlook

  • Strong momentum and outperformance continued into the new year
  • Q1 UK RevPar(1) up 17.6%(3) on prior year (STR Mid & Econ. Market 10.7%)
  • EBITDA(2) for the 12 months to the end of Q1 2015 of £77.3m(3)
  • 15 new hotels expected to open in 2015 with 5 already open
  • On-track to continue our turnaround and deliver further growth

 

Peter Gowers, Travelodge Chief Executive commented:

“The value hotel market is performing well and new Travelodge is delivering strong outperformance.  Our £100m modernisation programme is nearing completion.  New king-size Travelodge Dreamer® Beds have been introduced in every UK hotel and 90% of our UK rooms now feature our new room design.  Customer feedback on our changes has been excellent and we have seen strong growth from business customers.  The improved guest experience and effective yield management have led to significant profit growth.”

“The momentum we saw in 2014 has continued into the new year and we have seen an encouraging start to 2015.  The value hotel market remains strong and we continue to outperform our competitive set.  We see considerable potential for further like-for-like sales growth and are targeting the roll out of the brand to at least 250 further sites across the UK.”

Financial Performance

Our new Travelodge strategy to improve quality levels and drive effective yield management is delivering strong results, with significant outperformance of our market segment.

2014 RevPar was up 16.8% to £34.24, outperforming the Smith Travel Research Midscale and Economy Sector growth for the same period of 12.3%.

Substantial improvements in our room product fuelled significant growth from business customers and these trends, together with effective yield management led to a 15.1% increase in our average room rates to £45.33 (2013: £39.38).  Occupancy was also up by 1.0 percentage point, to 75.5% (2013: 74.5%).  

Growth was particularly strong in the UK regions, where the economic recovery gathers pace and we continue to outperform.

Total revenues were up 14.9% to £497.2m.  With costs tightly controlled, 2014 EBITDA was up 63.5% to £66.2m. 

Our strong momentum and outperformance continued into the first quarter of 2015. 

For the 12 months to the end of Q1 2015, EBITDA increased to £77.3m.

Operational Review

We have made excellent progress on the ‘new Travelodge’ strategy set out in 2013.

Encouraged by the early returns from our modernisation programme, we took the decision in early 2014 to accelerate the roll-out of our new-look room design and to install the new Travelodge Dreamer® beds in every UK hotel by October 2014.

90% of UK rooms now feature the new look and feel.  Customer feedback has been excellent, with a Trip Advisor score of 4 out of 5 stars at our modernised hotels.  

We commenced our first advertising campaign for 4 years in mid-2014 to reinvigorate our brand, which is one of the best known in the UK with 90.5% recognition.  Our strong direct distribution model, with almost 80% of reservations made online direct with Travelodge, led to almost 1 million visits to www.travelodge.co.uk every week. 

We opened five new hotels (515 rooms) in 2014 and closed the year with 38,430 rooms across the UK, Spain and Ireland. 

We expect to open fifteen new hotels with a further 1,300 rooms in 2015.

The new hotels for 2015 include London locations at Wembley (opened in February), Richmond and Greenwich; a new central Glasgow property and key regional locations including the Thames Valley tech corridor, Southampton (opened in March) and Bristol.

We have identified potential for more than 250 further hotels across the UK, with the new hotels expected to support the creation of more than 3,000 new jobs. 

Secondary market sales for Travelodge hotels have been strong and our shareholders acquired 144 Travelodge hotels from independent landlords during 2014.

---Ends---

 

For further information, please contact:

Travelodge Press Office

01844 358 703

pressoffice@travelodge.co.uk

 

 

About Travelodge:

Founded in 1985, Travelodge is the UK’s largest independent hotel chain, operating over 500 hotels and 38,000 rooms across the UK, Ireland and Spain. Over 17 million people stayed with Travelodge last year, with almost 80% of all reservations made online at www.travelodge.co.uk, which attracts almost 1 million visits each week.

 

The company has embarked on a strategy to build a new Travelodge that is Britain’s favourite hotel for value. A major part of this is a new contemporary look, including a luxurious bespoke king-size bed called the Travelodge Dreamer, which is being delivered through a £100 million nationwide modernisation programme. To date, 90% of Travelodge hotels incorporate this new modern look, and all 38,000 Travelodge rooms across the UK now feature the Travelodge Dreamer bed. 

Notes:

2014 financial results in this summary document are extracts from the statutory accounts of Thame and London Limited and its subsidiary companies, including Travelodge Hotels Limited. 

 

Smith Travel Research (STR) is an independent hotel research provider, providing aggregate benchmarking information on the UK and other hotel market performance.